Etihad’s “The Residence” Is A Clever Use of Normally-Dead Space on the A380

Etihad

Air travel bloggers are abuzz about the new offering from Etihad called “The Residence.” This “class above First” is actually a three room suite meant for 2 people to share. Sounds amazing, right? Well it is, and my initial thought was that it was incredibly stupid and would never make a profit. While this is Etihad and profit doesn’t seem to be to be a top priority, I’ve actually changed my mind on this. This is a pretty clever use of space.

What’s so clever about this? Well, this is being put on the A380, and the A380 normally has a lot of wasted space at the front of the upper deck. There is a big staircase that goes downstairs at the front and that leaves awkward areas on each side that can’t be used for seating. Most airlines have failed to find anything great to put there.

Korean A380 Lounge

Qantas has a little lounge on one side and a galley on the other. Korean has a lounge on one side (above) with a lavatory on the other. Emirates went with a big lavatory on each side that had the first airborne shower on a commercial jet. These are all fine uses, but they don’t get more people on the airplane. They also don’t get those people on the airplane to pay any more. Behold, The Residence.

Etihad The Residence

Etihad carved out an area on the port side that would have normally just had a First Class suite. But then the airline extended that forward into the awkward space. The result is a sitting room where the First Class suite would have been, then a lavatory in front with a shower, and finally a bed wedged into the nook at the front. All of that is behind closed doors. That’s pretty creative.

Etihad Residence Bed

To do this, Etihad had to go with a very spacious First Class layout. In the area where Emirates fits 14 First Class suites today, Etihad will only fit 9 plus The Residence. Instead of having two aisles like every other airline, Etihad will just have one aisle down the middle in First Class.

I find it hard to believe that this sparse First Class layout is profitable, but then again, this is the airline that has been building a fourth alliance by continuing to pour money into Air Berlin and trying to buy a piece of Alitalia. This has to be much more about prestige than profit. But if you’re going to put so much into a First Class product, then The Residence is a worthwhile addition.

The Residence is actually more than just the physical layout. There’s a VIP concierge who handles everything from the moment a reservation is made. A limo is sent to pick up and drop off the traveler. And on the airplane, there is a butler and a chef to serve every need. This just sounds so silly, but if someone is willing to pay it (and if anyone is, that person is in the Middle East), then it’s not the worst idea around.

And just how much is it that you’ll have to pay for this privilege?

Well, Etihad puts the A380 into service on December 27 from Abu Dhabi to London. For that relatively short 8 hour flight, you’re looking at a little over $21,000 one way. If you want to fly from Sydney to Abu Dhabi in First Class and then connect to The Residence for the flight on to London, it only increases the fare a mere $8,000 one way.

Think that’s not a great deal? Well, does it help you to know that you can bring 2 people for the price of one? See, the Residence is designed for two people, but they obviously can’t sell those 2 seats independently. So one or two people cost the same amount.

So far, in the first month it operates, I see three of them sold from Abu Dhabi to London. That’s on the inaugural on December 27 and the day after (neither of which may actually have been sold to paying passengers) as well as on January 6. But I can understand why people wouldn’t book so far in advance even if they were interested. The fares are refundable only minus a 20 percent fee if you cancel more than 30 days in advance. The penalty increases until you’re within 2 days of travel. Then it’s non-refundable.

I’m still highly skeptical of the super premium strategy that Etihad and Emirates are employing with First Class and a class beyond (Emirates is working on besting Etihad right now), but you know, if your name is Monty Brewster and you need to blow a ton of money in a short amount of time, this is definitely one way to do it.

32 comments on “Etihad’s “The Residence” Is A Clever Use of Normally-Dead Space on the A380

  1. “A limo is sent to pick up and drop off the traveler. And on the airplane, there is a butler and a chef to serve every need. ”

    Etihad already offers limo service for business class passengers in many destinations, it isn’t just a first class thing let alone a benefit of The Residence.

    Meanwhile the onboard chef concept is already a part of Etihad’s first class offering. They have one flight attendant dressed as a chef and that person has restaurant training. The execution varies greatly, from chef to chef, but combined with Etihad’s extensive menu and dine anytime offerings they put together one of the better culinary offerings in the sky.

    Interesting the onboard chef is something that british midland offered… under James Hogan… now of Etihad.

    In any case, the onboard chef isn’t limited to the Residences and isn’t something new for the airline either.

    I flew Etihad first class Washington Dulles – Abu Dhabi a couple of weeks ago, had the car service pickup at home and the onboard chef in ‘just’ the regular first class with doors. :)

    1. Gary Leff – Thanks for the clarification. I knew the limos were nothing new, but I wasn’t sure about the onboard chef. I assume the butler is dedicated though. Either way, not a ton of extra expense to deliver the service.

  2. This makes me a little sad.

    Not because I’ll never be able to afford it. Which of course I can’t.

    But because the other A380 operators might get the same idea, and then I’ll lose the private lounge. Let me explain…

    I’ve flown KE a few times in business on the A380, and that lounge on the right, upfront, is empty the entire time. When I get bored in my seat, or a little stir crazy, I go up to the lounge with my iPad, belt myself in, and help myself to the bottle of Absolut in the cooler. It’s a nice way to spend a few hours, without listening to the snoring. For a lot less than 20K.

    Stop reading this KE. Nothing to see here. Move along…

    1. Neil – Of course, if you’re on Korean, you can also go back to the huge lounge in the back of the cabin. Yes it’s louder and busier, but there are still plenty of options other than your seat. Then again, Korean has gone with a REALLY not dense layout.

  3. While it’s impressive to see this opulence on a commercial aircraft it’s nothing new for private jets, and there’s the rub. The people with the means to pay for these seats probably have the means for their own private charter. I can’t see any (western) private business spending the $$$ for this seat, so it seems to me more like a seat for us common folk that came into some cash suddenly, i.e. lotto win.

    What I see here is a flaw in the Airbus design. Why can’t their engineers re-work the layout to put more seats in and maximize the floorspace? If I were an airline operator I’d be talking to the folks in Toulouse and not adding suites for people that want to join the “mile high club.”

    1. A – First, I agree completely on the Airbus design issue. That’s a big waste of space up there and it’s a real shame. But if you’re an airline, this is the best use I’ve seen of that wasted space.

      Now, regarding the private vs Residence decision, I think of a lot of flying international First Class (for some but not all) isn’t just being rich but showing everyone else that you’re rich. Can’t show off in a private jet, right? But I think there are big cultural differences.

    2. $20,000 wil not buy you a private jet flight from Europe to NY. If it does, it will be a very small one, where the conditions are much more cramped. To get this type of luxury on a private jet it would have to be a G650 at least, which costs a couple of times more for such a flight. So purely mathematically it is not the same.

  4. As other’s have said, if you have the money for this, you have the money for a private plane. And while it is possible to see a trip requiring a plane that can make intercontinental flights in one shot, the advantage of private charters or ownership is scheduling and lifting off at a moment’s notice. I don’t really see a situation where being pampered would take over simply getting to your destination when you want to, especially if you’re likely to be staying in a fancy hotel when you arrive regardless.

    1. I wonder if this isn’t like the Y-Class corporate trick that some people use. If your company is under fire for having a private jet, they could sell it for a good chunk of change and then buy tickets in the Residency. Your executive is no longer “flying a private jet” and you get the PR bump but your exec doesn’t really lose quality.

      Similarly going back to the Y-Class “coach” (with automatic upgrade to first). It might be a way to circumvent corporate policy. I wonder if there isn’t a special class of first class ticket that gets you an automatic upgrade to The Residence. Then you’re just buying a regular “First Class Ticket” and keeping within the letter of your corporate travel policy with the perk of flying with a private suite.

      All of that aside… are there no windows in that suite? No windows, no interest from me. Half the fun of flying is peaking outside.

    2. You clearly have not even a remote idea what it costs to operate a private jet with a long haul/intercontinental range??? It’s something around $10,000 to $17,000 per HOUR!! The Residence is a bargain for people who would otherwise fly private simply because they don’t want to share space with other travelers.

  5. I guess the real question is: Do they ever have to actually sell this for it to be worth something to them?

    If a lot of First isn’t paid – miles, upgrades – and if this is all wasted space, except for the First seat it took out, the millions in free PR they got last week – and presumably when it launches from reviews – makes it worth it.

    I know they’re not all about profit, but I am not sure they’re actually losing money with this, even if it’s never flown paid. (Or rarely.)

    1. Hrm, I thought non-US carriers were much better at getting passengers to pay for First Class..

      Can you get an upgrade into the residence? Or its it paid only?

    2. Neil S/Nick Barnard – Not sure if you can upgrade but you can redeem something like 2 million miles to sit in it if you want. My broader issue is with a big international First Class cabin than this specific idea. The idea itself may be profitable if it can sell a few of them, but will the whole international First Class be profitable? That’s where I’m more skeptical.

    1. Jerry Mandel – No, that’s just a rebranding. The First Class section is now called the First Apartment with Business Class becoming the Business Studio.

  6. The front upper deck space sounds like a great place for a crew rest area — you can probably fit 6 bunk beds on one side. I know some airlines have crew rest beds in the crown of a 777 (or is it a 747?). Where are the crew rest areas currently on the 380?

    1. @Ron: There was an enclosed space with crew (cockpit) rest bunks just behind the cockpit on the upper deck of the 747SP, so I imagine that the same exists on the more recent long-range 747/s.

  7. Even if the space isn’t booked all of the time, it has more potential revenue generating capabilities than empty space or another restroom facility.

  8. I think they will sell the space more often than not.

    It’s significantly cheaper than chartering a super-mid (Challenger 300) or heavy jet (Falcon 2000) for a personal trip. One way alone at $4,200/hr @minimum 7hrs for a Falcon 2000EX on the cheap end is $28,000 US, bare bones base price before services, ground handling, crew overnight, ground transportation, fuel surcharges, catering, taxes etc.; and (Huge IF) if you can find a one way trip as opposed to a round trip with daily minimums and so on.

    You also get to show off to all 400 other passengers.

    From my interaction with high value aircraft owners, they do keep a very sharp eye on aircraft expenses. Not everyone over there is a Sheik.

  9. Remember too, that the various gulf carriers have a significant amount of “business” from their sponsoring royal families, Abu Dhabi’s Al Nahayan family in Etihad’s case.

    In fact, there’s a lot of discussion about Etihad getting subsidies right now, which Hogan is vociferously denying. There’s probably a case to be made that an offering like this, “purchased” by the Emir’s family, isn’t a subsidy, while, in practice, achieving the same result.

    (For the record, this is purely speculative. I have no actual information to support my supposition.)

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